European Union - Gross capital formation (% of GDP)

Gross capital formation (% of GDP) in European Union was 22.07 as of 2020. Its highest value over the past 50 years was 30.02 in 1970, while its lowest value was 19.89 in 2013.

Definition: Gross capital formation (formerly gross domestic investment) consists of outlays on additions to the fixed assets of the economy plus net changes in the level of inventories. Fixed assets include land improvements (fences, ditches, drains, and so on); plant, machinery, and equipment purchases; and the construction of roads, railways, and the like, including schools, offices, hospitals, private residential dwellings, and commercial and industrial buildings. Inventories are stocks of goods held by firms to meet temporary or unexpected fluctuations in production or sales, and "work in progress." According to the 1993 SNA, net acquisitions of valuables are also considered capital formation.

Source: World Bank national accounts data, and OECD National Accounts data files.

See also:

Year Value
1970 30.02
1971 28.81
1972 28.23
1973 28.79
1974 28.85
1975 25.69
1976 26.72
1977 25.80
1978 25.03
1979 25.95
1980 26.57
1981 24.17
1982 23.60
1983 22.83
1984 22.88
1985 22.79
1986 22.69
1987 22.77
1988 23.84
1989 24.70
1990 24.91
1991 24.31
1992 23.32
1993 21.44
1994 21.84
1995 22.29
1996 21.73
1997 21.96
1998 22.71
1999 22.99
2000 23.65
2001 23.01
2002 22.07
2003 22.04
2004 22.29
2005 22.52
2006 23.56
2007 24.44
2008 24.02
2009 20.63
2010 21.19
2011 21.74
2012 20.31
2013 19.89
2014 20.29
2015 20.74
2016 20.95
2017 21.57
2018 22.15
2019 22.93
2020 22.07

Limitations and Exceptions: Because policymakers have tended to focus on fostering the growth of output, and because data on production are easier to collect than data on spending, many countries generate their primary estimate of GDP using the production approach. Moreover, many countries do not estimate all the components of national expenditures but instead derive some of the main aggregates indirectly using GDP (based on the production approach) as the control total. Data on capital formation may be estimated from direct surveys of enterprises and administrative records or based on the commodity flow method using data from production, trade, and construction activities. The quality of data on government fixed capital formation depends on the quality of government accounting systems (which tend to be weak in developing countries). Measures of fixed capital formation by households and corporations - particularly capital outlays by small, unincorporated enterprises - are usually unreliable. Estimates of changes in inventories are rarely complete but usually include the most important activities or commodities. In some countries these estimates are derived as a composite residual along with household final consumption expenditure. According to national accounts conventions, adjustments should be made for appreciation of the value of inventory holdings due to price changes, but this is not always done. In highly inflationary economies this element can be substantial.

Statistical Concept and Methodology: Gross domestic product (GDP) from the expenditure side is made up of household final consumption expenditure, general government final consumption expenditure, gross capital formation (private and public investment in fixed assets, changes in inventories, and net acquisitions of valuables), and net exports (exports minus imports) of goods and services. Such expenditures are recorded in purchaser prices and include net taxes on products.

Aggregation method: Weighted average

Periodicity: Annual

Classification

Topic: Economic Policy & Debt Indicators

Sub-Topic: National accounts